🪙Aelin Tokenomics

The Aelin token (AELIN) will be used to incentivize coordination and growth within the Aelin DAO. It will have two primary functions: (a) staking and (b) governance.

Holders of AELIN tokens will have a direct say in how the DAO is run. In this way, the Aelin token will create a powerful incentive for members to work together for the common good of the organization.

Further Reading: New Tokenomics (Aelip: 14) in Review

TLDR

• New Tokenomics - An AELIN buy-back mechanism where a 2% protocol fee on each deal token is escrowed for six months, then sold for AELIN tokens which are distributed to AELIN/wETH LPs, single-sided stakers, and the Aelin treasury.

  • 45% to AELIN/wETH LPs

  • 25% to single-sided AELIN stakers

  • 30% allocated to Aelin treasury

• Aelin's initial tokenomics would've directly distributed deal fees to stakers which wasn't viable. It would've distributed a small number of deal tokens to many stakers, making Aelin's staking cost prohibitive.

• Because some deals were completed under the initial tokenomics but never distributed to stakers, an interim deal fee distribution (AELIP 31) was implemented. It takes 50% of the AELIN rewards from the initial buyback and sets it aside for historical stakers to claim (those staked during the deals).

Tokenomics Deep Dive

The 2% protocol fee on each deal will be collected in the underlying deal token, escrowed for six months, and then sold by the Aelin council once the escrow is complete to purchase AELIN and distribute it to single-sided stakers, LPs, and the Aelin treasury.

Deal tokens will be sold by the Council directly on an AMM or via an aggregator for AELIN tokens. If the sale of deal tokens causes more than a 1% price movement in the deal token, the sale amount will be spread out in smaller chunks over a longer time interval managed by the Aelin Council. In this case, the Council will either use a TWAMM (sell x tokens per day over y days) or manage the process manually over time.

Suppose AELIN tokens are unavailable via an aggregator or AMM where the deal token has liquidity. In that case, the Council will first buy the native chain tokens (ETH, AVAX, FTM...) and then complete a second transaction to purchase the AELIN tokens.

The resulting AELIN tokens will be distributed to the Aelin Treasury (30%) along with single-sided stakers (25%) and LPs (45%), who will claim them from staking rewards contracts on the network where the deal occurs. The rewards will be emitted over the next quarter for stakers and LPs.